Jute Sector Development Fund

Ministry seeks initial amount of Tk 5.0bn

FE Report | Sunday, 29 September 2019

The jute ministry has requested the finance ministry to create an initial low-cost fund of Tk 5.0 billion out of the proposed Jute Sector Development Fund (JSDF) of Tk 100 billion.
It also recommended increasing the cash incentive for jute yarn from existing 7.0 per cent to 12 per cent while for jute finished products (hessian, sacking, CBC) from 12 per cent to 17 per cent and for diversified jute goods from 20 per cent to 25 per cent.
The Ministry of Textiles and Jute made the requests separately in two letters on September 17, signed by minister Golam Dastagir Gazi.
The jute ministry sent the letters to the finance ministry following a meeting with Prime Minister Sheikh Hasina regarding development of the jute sector.
The meeting directed creating primarily a fund of Tk 5.0 billion with 2.0 per cent interest rate. It also suggested increasing the JSDF gradually to Tk 100 billion.
According to a letter, many jute mills were closed due to becoming loan defaulter because of financial their crises.
There are a total of 285 jute mills in the country. Of those, 42 private jute mills, 12 spinning mills and one state-run jute mills were closed despite different steps taken by the government, it said.
Except the jute sector, different industries get loans from Bangladesh Bank's 'Export Development Fund' to import raw materials. But the jute sector is not eligible for getting the fund as they source their raw materials from the local market.
So, it is necessary to build such fund for the sector, according to the letter.
Bangladesh earns about Tk 4.45 billion annually from export of jute goods. But the earnings from the sector declined by about 21 per cent in the fiscal year 2018-19 compared to that of the previous fiscal, it also said.
It said that the jute sector is passing through a crucial time due different reasons like anti-dumping duty by India and political conflicts in the important markets of Middle East.
Besides, Bangladeshi exporters also lost their market share in Africa. So the overseas sales of jute goods shrunk significantly, the letter mentioned.
Bangladesh exports jute goods to 135 countries including China, Turkey, India, Sudan and Zimbabwe.
About 7.0 to 8.0 million bales of raw jute are produced in the country each year. Nearly 40 million people are engaged in this sector.
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